China may block TSMC from selling chips to the United States under a new export control policy involving rare earth materials. This move could spark another wave of tensions in the global tech industry.
The Chinese government plans to require export licenses for products that use critical materials from its territory. This would directly affect manufacturers such as TSMC, Samsung, and SK hynix. China currently controls about 90% of the world’s production of “rare earths” and is now seeking to tighten control over how and where these strategic resources are used.
China Starts a New Tech Battle Over Rare Earths
The new rule, expected to take effect on November 8, would require companies that make advanced chips to apply for special export permits — even if production occurs outside China. In practice, this gives Beijing the power to block the sale of high-performance semiconductors to U.S. companies such as Nvidia, AMD, and Apple, which rely on TSMC for their most advanced chips.
The impact would be especially serious in the artificial intelligence sector, where next-generation chips are essential for training large-scale models. Any disruption in supply could delay technological progress for many companies.
Equipment suppliers like ASML and Tokyo Electron might also be affected, as their production processes use materials derived from Chinese rare earths.
In short, China’s new approach marks a major change — moving from focusing on military restrictions to directly controlling the flow of advanced technology to the West. This could threaten the global semiconductor supply chain and reveals a new stage in the tech rivalry between China and the United States.
